Race and ethnicity matter for economic success and opportunity

New Metropolitan Council research reports show that even when accounting for demographic differences, white people and people of color in the region do not have the same opportunity for success.

The analysis examined the role that a range of demographic differences play in outcomes for white residents and residents of color. The findings showed that even when holding equal the factors of age, immigrant status and English skills, along with other factors such as educational attainment, significant disparities between white residents and residents of color remained—particularly for African Americans.

Put simply, even if black residents in the region had the same demographic profile as white residents, their homeownership rate, employment rate, and average hourly income would still be lower than whites.

“Race and ethnicity matter when it comes to access to opportunity,” said Metropolitan Council Member Gary Cunningham of Minneapolis.

“Racial disparities have been stubbornly and persistently entrenched in this region for decades. It will take deliberate and thoughtful work involving many in our community – government, non-profits, community leaders and more – to bring greater equity through policies and new approaches,” he continued.

One of the largest disparities is between black and white homeownership. After adjusting for a number of demographic factors, including household income and the number of workers in the household, the homeownership rate for black households increases from 24.7 percent to 48.1 percent; this is still well below the 75.7 percent homeownership rate for white households.

Relationship between demographics and disparities

A previous Metropolitan Council MetroStats report showed that compared with the 25 most populous metro areas, people of color in the 16-county Twin Cities metro area face some of the largest disparities in the country in terms of poverty, homeownership, employment, and level of education.

To dig deeper into their earlier analysis, Council researchers sought to examine the role demographics may play in those disparities, based on the following:

Residents who are younger and who are immigrants generally have a lower employment, income, and homeownership rate than residents who are older and U.S. born.

Residents of color – black, Latino and Asian residents – tend to be younger, are more likely to be immigrants and less confident in their English-speaking skills as white residents.

Using statistical modeling to adjust for these demographic differences and others, the analysis found that while demographic differences are partly responsible for disparities by race and ethnicity, many disparities remained even when the influence of those demographic differences was removed.

In short, race and ethnicity – and not simply other demographic differences – are driving the racial disparities we see in our region.

We must do better

“These findings confirm long-held beliefs about the presence and persistence of structural racism in our Twin Cities community,” said Council Chair Adam Duininck. “Disparities related to race or ethnicity are unconscionable and unacceptable. We can and must do better.”

Currently, people of color account for about a quarter of the region’s population of 3 million people. By 2040, however, people of color will account for more than 40 percent of the Twin Cities population, according to Metropolitan Council forecasts.

With nearly all the region’s workforce growth coming from residents of color in the next decades, Council officials warn that economic disparities threaten to undermine the region’s ability to remain economically prosperous.

“At the Council, we are taking steps to integrate greater equity into our policies, practices, and operations,” said Duininck. “As a region, we’ve got a long way to go toward closing these gaps. They hold us back from our ability to grow and thrive as a region. I thank the Governor and Lt. Governor for their leadership to help us address these and promote access to opportunity for everyone.”

The Metropolitan Council’s Community Development Committee will conduct a public hearing on Monday, August 20, 2018, at 4 PM to receive public comment on the proposed 2019 Public Housing Agency (PHA) Annual Plan.